La. Admin. Code tit. 37 § XI-1311

Current through Register Vol. 50, No. 9, September 20, 2024

Section XI-1311 - Advertisements of Benefits Payable, Losses Covered or Premiums Payable

A. Deceptive Words, Phrases or Illustrations Prohibited

1. No advertisement shall omit information or use words, phrases, statements, references or illustrations if the omission of such information or use of such words, phrases, statements, references or illustrations has the capacity, tendency or effect of misleading or deceiving purchasers or prospective purchasers as to the nature or extent of any policy benefit payable, loss covered, or premium payable. The fact that the policy offered is made available to a prospective insured for inspection prior to consummation of the sale or an offer is made to refund the premium if the purchaser is not satisfied, does not remedy misleading statements.

2. No advertisement shall contain or use words or phrases such as all, full, complete, comprehensive, unlimited, up to, as high as, this policy will help pay your hospital and surgical bills, this policy will help fill some of the gaps that Medicare and your present insurance leave out, this policy will help to replace your income (when used to express loss of time benefits); or similar words and phrases, in a manner which exaggerates any benefits beyond the terms of the policy, or which may lead the policyholder to expect payment of benefits which he is not likely to derive, except in very unusual circumstances.

3. An advertisement shall not contain descriptions of a policy limitation, exception, or reduction, worded in a positive manner to imply that is a benefit, such as, describing a waiting period as a benefit builder, or stating even pre-existing conditions are covered after two years. Words and phrases used in an advertisement to describe such policy limitations, exceptions, and reductions shall fairly and accurately describe the negative features of such limitations, exceptions, and reductions of the policy offered.

4. No advertisement of a benefit for which payment is conditional upon confinement in a hospital or similar facility shall use words or phrases such as extra cash, extra income, extra pay, or substantially similar words or phrases because such words and phrases have the capacity, tendency or effect of misleading the public into believing that the policy advertised will, in some way, enable them to make a profit from being hospitalized.

5. No advertisement of a hospital or other similar facility confinement benefit shall advertise that the amount of the benefit is payable on a monthly or weekly basis when, in fact, the amount of the benefit payable is based upon a daily pro rata basis relating to the number of days of confinement unless such statements of such monthly or weekly benefit amounts are followed immediately by equally prominent statements of the benefit payable on a daily basis; for example, either of the following statements is acceptable: "$1,000.00 a month ($33.33 a day) or $33.33 a day ($1,000.00 a month)". When the policy contains a limit on the number of days of coverage provided, such limit must appear in the advertisement.

6. No advertisement of a policy covering only one disease or a list of specified diseases shall imply coverage beyond the terms of the policy. Synonymous terms shall not be used to refer to any disease so as to imply broader coverage than is the fact.

7. An advertisement for a policy providing benefits for specified illnesses only, such as cancer, or for specified accidents only, such as automobile accidents, shall clearly and conspicuously, in prominent type, state the limited nature of the policy. The statement shall be worded in language identical to, or substantially similar to. the following: "this is a limited policy "; "this is a cancer only policy "; "this is an automobile accident only policy ".

8. An advertisement of a direct response insurance product shall not imply that because "no insurance agent will call and no commissions will be paid to agents" that it is "a low cost plan," or use other similar words or phrases because the cost of advertising. and servicing such policies is a substantial cost in the marketing of a direct response insurance product.

9. An advertisement for a policy specifically designed to augment benefits available under the Federal Medicare Act shall not exaggerate the policy benefits and shall clearly disclose in unmistakable language what Medicare benefits the policy is designed to complement, and what Medicare benefits the policy will not complement. No such advertisement shall use the term Medicare Supplement, or similar term, to describe the policy being offered unless the policy provides a benefit for those items that make up the deductible and related coinsurance amounts of Part A and Part B of the Federal Medicare Act.

10. An advertisement that makes a reference to the policy benefits being paid directly to an insured is prohibited unless, in making such a reference, the advertisement includes a statement that the benefits will be paid directly to a hospital or any other provider of health care services if an assignment of the policy benefits has been made.

B. Exceptions, Reductions and Limitations

1. When an advertisement refers to either a dollar amount, or a period of time for which any benefit is payable, or the cost of the policy, or specific policy benefit, or the loss for which such benefit is payable, it shall also disclose those exceptions, reductions and limitations affecting the basic provisions of the policy without which the advertisement would have the capacity or tendency to mislead or deceive.

2. When a policy contains a waiting, elimination, probationary or similar time period between the effective date of the policy and the effective date of coverage under the policy or a time period between the date a loss occurs and the date benefits begin to accrue for such loss, an advertisement which is subject to the requirements of the preceding paragraph shall disclose the existence of such periods.

3. An advertisement shall not use the words only, just, merely, minimum or similar words or phrases to describe the applicability of any exceptions and reductions, such as:

"This policy is subject to the following minimum exceptions and reductions."

C. Pre-Existing Conditions

1. An advertisement which is subject to the requirements of §1309. B shall, in negative terms, disclose the extent to which any loss is not covered if the cause of such loss is traceable to a condition existing prior to the effective date of the policy. The use of the term pre-existing condition without an appropriate definition or description shall not be used.

2. When a policy does not cover losses resulting from pre-existing conditions, no advertisement of the policy shall state or imply that the applicant's physical condition or medical history will not affect the issuance of the policy or payment of a claim thereunder. This rule prohibits the use of the phrase no medical examination required and phrases of similar import, but does not prohibit explaining automatic issue. If an insurer requires a medical examination for a specified policy, the advertisement shall disclose that a medical examination is required.

3. When an advertisement contains an application form to be completed by the applicant and returned by mail for a direct response insurance product, such application form shall contain a question or statement which reflects the pre-existing condition provisions of the policy immediately preceding the blank space for the applicant's signature. For example, such an application form shall contain a question or statement substantially as follows:

a. Do you understand that this policy will not pay benefits during the first ______ year(s) after the issue date for a disease or physical condition which you now have or have had in the past? yes

b. or substantially the following statement:

I understand that the policy applied for will not pay benefits for any loss incurred during the first _____ year(s) after the issue date on account of disease or physical condition which I now have or have had in the past.

La. Admin. Code tit. 37, § XI-1311

Promulgated by the Department of Insurance, Commissioner of Insurance, November 1, 1973.

AUTHORITY NOTE: Promulgated in accordance with R.S. 22:2.